Seagate's shares shot up 3.5 percent in after-hours trading on Tuesday after having gained 5.2 percent since Intel Corp's stellar results last week. The company is more reliant on corporate IT spending than its more consumer-oriented foe, Western Digital.

Analysts expect sales of both personal computers and higher-powered servers to continue growing throughout the year as corporations, after two years of belt-tightening, begin to upgrade outmoded equipment and target efficiencies.

"Storage and data growth has proven to be especially recession-resilient, because all that data needs to find a home," said Needham and Company analyst Richard Kugele. "The silly YouTube videos and Tweets are all storedoften multiple timesand it needs to find a place to go."

The world's largest maker of disk drives said net income rose to $518 million, or $1 a share, in its fiscal third quarter ended April 2, compared with a loss of $275 million, or 56 cents a share, a year ago.

Excluding items, Seagate earned $1.03 a share, ahead of the average analyst estimate of 94 cents a share, according to Thomson Reuters I/B/E/S.

Seagate posted a gross margin of 29.6 percent in its fiscal third quarter compared with Wall Street expectations for around 26.5 percent. Chief Executive Stephen Luczo said earlier he expects the company to operate above its stated target gross margin range of between 22 percent and 26 percent in 2010. [ID:nN2261421]

Revenue rose to $3.05 billion, from $2.15 billion the previous year, and just above the Wall Street target of $3.03 billion.

Seagate, based in Scotts Valley, California, normally forecasts earnings on its conference call instead of in its quarterly earnings press releases.

Seagate's shares rose to $20 after hours, after closing at $19.33 in the regular session. (Reporting by Ian Sherr, editing by Matthew Lewis)